The UK’s largest listed asset managers are being challenged over how they plan to eradicate their chronic gender pay gaps and boost the number of women in high-paying jobs managing money.
Schroders, Man Group, Standard Life Aberdeen and Jupiter have all been quizzed during their annual meetings by ShareAction, a charity that promotes responsible investment, on the gulf between male and female workers and the lack of female portfolio managers.
“The asset management industry has a particularly poor record on the gender pay gap, and gender diverse investment teams produce better results for clients,” said Catherine Howarth, chief executive of ShareAction. “We want to see the best decision-making.”
New disclosure rules compelling UK companies with at least 250 employees to report their gender pay gaps came into force last year.
The Investment Association, which represents the UK industry, said its members had a median pay gap of 31 per cent in the first year of reporting, higher than the 28 per cent pay gap for financial services in general. Some fund managers have reported a widening gap in the second year of data.
There have been numerous initiatives aimed at boosting women on boards but less attention given to gender diversity among those managing funds.
Only 10 per cent of active portfolio fund managers globally are women, according to Citywire, the financial data website. Nine per cent of funds domiciled in the UK are run by a female manager.
ShareAction asked the companies if they had published an action plan on how they will close the pay gap or if they would do so in the coming year.
It also asked how many portfolio managers were women, what percentage of the total that represented, and how many investment teams had at least 30 per cent female membership. The group asked the asset managers to disclose publicly diversity levels among portfolio managers and investment teams.
ShareAction, which has a holding in every FTSE 100 company, has also raised the same issues at St James’s Place, the wealth manager, and Prudential, the insurer that also offers fund management. It plans to ask questions at the annual meetings of Legal & General and Aviva — insurance groups with large asset management arms — before the end of the month.
“They’ve all been totally happy to acknowledge the challenge,” Ms Howarth said.
Many asset managers have stressed the need to promote women to higher-paying roles to eradicate the gap but progress has been slow. The industry has blamed mid-career dropout rates and a narrower pool of senior candidates as barriers.
Female portfolio managers also face a gap in their investment record if they go on parental leave. Morningstar includes analysis of individual portfolio managers as a factor in its fund ratings. “You can’t address [career breaks] in a nice neat way,” said Jackie Beard, Morningstar’s director of manager research services for Europe, Middle East and Africa. “It comes back to what data is available that the investor can use.”
Schroders, which has a median gender pay gap of 30 per cent, has stated that it plans to tackle this with measures such as increasing the proportion of women in senior management roles to 33 per cent by the end of the year. At the end of February, 32 per cent of senior managers were women.
Man, which has a median pay gap of 27.8 per cent, hopes to reduce the gap by attracting and retaining more female staff and boosting the number of women in senior roles.
Measures include enhanced parental leave and a goal for a quarter of senior management roles, a category that encompasses portfolio managers, to be occupied by women by the end of 2020, up from 22 per cent in 2018. Man’s chairman Ian Livingston said during the annual meeting that gender diversity needed to be tackled “front and centre”.
Jupiter is also looking to narrow its pay gap of 28 per cent through a broader push on gender diversity. During its annual meeting it disclosed that just three of its 36 portfolio managers were women, 12 per cent of its investment professionals were women and only two out of 13 investment teams had at least 30 per cent women.
Standard Life Aberdeen, which has a median gender pay gap of 31 per cent, is looking to eradicate this by boosting the number of women at all levels. The group does not track the number or percentage of female portfolio managers but said it was looking at doing so.
St James’s Place has a median 45.8 per cent gender pay gap, one of the worst in the industry. The wealth manager said it had set a target return rate of 90 per cent for employees who go on maternity leave.